Robert J. Samuelson – Robert J. Samuelson: Proposed Fed reforms worse than useless – washingtonpost.
Ever since its creation in 1913, the Federal Reserve has grappled with a daunting political contradiction. The Fed is charged with preventing the collapse of the banking and financial system, whose health is essential for the "real economy" of production and jobs. But financial bailouts usually occur when mistakes or misdeeds by bankers and investment professionals make them public pariahs. To do its job, then, the Fed protects — or seems to protect — an unpopular, disgraced and undeserving group. We are now witnessing this contradiction in full bloom. The Fed backlash is bipartisan. Lost in this politically charged climate is the reality that the Fed, more than any other government agency, arguably stopped last fall’s financial panic from becoming a global depression.